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Miami, Florida: Recording artist and man from Pennsylvania charged with $ 24 million Covid relief fraud program
(STL.News) – Florida record artist and the owner of a Pennsylvania towing company have been charged with their alleged involvement in a scheme to file fraudulent loan applications for more than $ 24 million in loans reimbursable from the Paycheck Protection Program (PPP) guaranteed by the Small Business Administration (SBA) under the Coronavirus Assistance, Relief and Economic Security Act (CARES).
Diamond Blue Smith, 36, of Miramar, Fla., And Tonye C. Johnson, 28, of Flourtown, Pa., Have been charged in federal criminal complaints filed in the Southern District of Florida for wire fraud, fraud banking and conspiracy to commit wire fraud and bank fraud. Smith was arrested and appeared yesterday before US District Judge Regina D. Cannon of the Northern District of Georgia. Johnson was arrested on October 1, 2020 and appeared on October 2, 2020 before U.S. District Judge Henry S. Perkin of the Eastern District of Pennsylvania. The complaints were unsealed today.
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Acting Assistant Attorney General Brian C. Rabbitt of the Criminal Division of the Department of Justice, Acting Special Agent in Charge Tyler R. Hatcher of the IRS- Criminal Investigation (CI) Miami Field Office, Special Agent in charge George L. Piro of the FBI Miami Field Office and Special Agent in Charge Kevin A. Kupperbusch of the US Office of the Inspector General (OIG), Division surveys, eastern regional office, made the announcement.
The criminal complaint against Smith alleges the following: Smith, a recording artist, obtained a PPP loan of $ 426,717 for his company, Throwbackjersey.com LLC, using forged documents. Upon termination of that loan, Smith then sought and obtained another PPP loan of $ 708,065 for his other company, Blue Star Records LLC, using forged documents. Smith bought a Ferrari for $ 96,000 and made other luxury purchases using the proceeds from the PPP loan. Authorities seized the Ferrari when Smith was arrested. He also withdrew $ 271,805 from the loan proceeds. The complaint further alleges that Smith applied for PPP loans on behalf of others in order to receive bribes for these Confederates.
The criminal complaint against Johnson alleges the following: Johnson obtained a PPP loan of $ 389,627 for his own company, Synergy Towing & Transport LLC using forged documents. Johnson paid part of the loan proceeds to the scheme’s co-conspirators.
According to the complaints, Smith and Johnson conspired with others to obtain millions of dollars in fraudulent P3 loans. It is alleged that at the start of their scheme, Smith and Johnson co-conspirator Phillip J. Augustin obtained a fraudulent PPP loan for his talent management company using forged documents. After submitting this request, Augustine then began to work with other co-conspirators on a plan to submit numerous fraudulent PPP loan requests for Confederate loan seekers, in order to receive bribes to obtain forgivable loans for them, according to court documents. The complaints allege that the program involved the preparation of at least 90 fraudulent claims, most of which were submitted. According to the complaints, Augustine, Smith, Johnson and other program conspirators requested P3 loans totaling more than $ 24 million. Many of these loan applications have been approved and funded by financial institutions, contributing at least $ 17.4 million.
The following 11 defendants are accused in other unsealed complaints of being involved in this fraud scheme:
- Joshua J. Bellamy, 31, of St. Petersburg, Fla., Was indicted in a federal criminal complaint filed September 9, 2020 in the Southern District of Florida for wire fraud, bank fraud and conspiracy to commit crime. wire fraud and bank fraud;
- Tiara Walker, 37, of Miami Gardens, Fla., Has been charged in a federal criminal complaint filed Sept. 3, 2020, in the Southern District of Florida, for wire fraud, bank fraud and conspiracy in view commit wire fraud and bank fraud;
- Damion O. Mckenzie, 38, of Miami Gardens, Fla., Was indicted in a federal criminal complaint filed August 3, 2020 in the Southern District of Florida for wire fraud, bank fraud and conspiracy to commit fraud wire and bank fraud;
- Andre M. Clark, 46, of Miramar, Fla., Has been indicted in a federal criminal complaint filed Aug. 3, 2020 in the Southern District of Florida for wire fraud, bank fraud and conspiracy to commit fraud by wire and bank fraud;
- Keyaira Bostic, 31, of Pembroke Pines, Fla., Was indicted in a federal criminal complaint filed August 3, 2020 in the Southern District of Florida for wire fraud, bank fraud and conspiracy to commit wire fraud and bank fraud;
- Phillip J. Augustin, 51, of Coral Springs, Fla., Was indicted in a federal criminal complaint filed July 28, 2020 in the Northern District of Ohio for wire fraud, bank fraud, conspiracy to commit wire and bank fraud, and obstruction;
- Wyleia Nashon Williams, 44, of Fort. Lauderdale, Florida was indicted in a federal criminal complaint filed July 28, 2020 in the Northern District of Ohio for wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
- James R. Stote, 54, of Hollywood, Florida, was indicted in a federal criminal complaint filed June 24, 2020 in the Northern District of Ohio for wire fraud, bank fraud and conspiracy to commit crime. wire fraud and bank fraud;
- Ross Charno, 46, from Fort. Lauderdale, Florida was charged in a federal criminal complaint filed June 24, 2020 in the Northern District of Ohio for wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud;
- Deon D. Levy, 50, of Bedford, Ohio, has been charged in a June 8, 2020 federal complaint in the Northern District of Ohio with wire fraud and conspiracy to commit wire fraud ; and
- Abdul-Azeem Levy, 22, of Cleveland, Ohio, has been charged in a federal complaint filed June 8, 2020 in the Northern District of Ohio for wire fraud and conspiracy to commit wire fraud
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $ 349 billion in forgivable loans to small businesses for job maintenance and certain other expenses, through the PPP. In April 2020, Congress authorized more than $ 300 billion in additional P3 funding.
The PPP allows small businesses and other eligible organizations to receive loans with a two-year term and an interest rate of one percent. The proceeds of the PPP loan are to be used by businesses on salary costs, mortgage interest, rent, and utilities. The PPP allows the interest and principal to be fully written off if the business spends the loan proceeds on those expense items within a specified time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on the items. salary expenses.
A federal criminal complaint is only an accusation. An accused is presumed innocent until proven guilty beyond a reasonable doubt in court.
The Smith and Johnson cases were investigated by the IRS-CI field offices in Miami and Cincinnati, the FBI field offices in Miami and Cleveland, and the SBA-OIG. Assistant U.S. Attorneys Aimee Jimenez and David Snider for the Southern District of Florida and Trial Attorney Philip Trout of the Fraud Section of the Criminal Division are continuing these cases. The Department of Justice also acknowledges and thanks the United States Attorney’s Office for the Northern District of Ohio, the IRS-CI Field Office in Philadelphia, the FBI Field Office in Philadelphia, and the Office of the Federal Deposit Insurance Corporation Inspector General for their assistance in investigating this matter.
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